Why gold might yet lose its price advantage

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Why gold might yet lose its price advantage

13 Jan, 2013

Sugata Ghosh, ET Bureau

For centuries, demure Japanese brides with their white face make-up and painted red lips were happy with obi, a kimono sash, as a gift. De Beers changed all that in the late 1960s. An ad blitz drove the message that it's the diamond ring that symbolised the modern woman. A market was born.

Decades later, a lobby of gold miners tried something similar in India. It hired the leading lady in the most-watched saas-bahu soap to run a string of ads on television and in newspapers, where the lady, by then a household name, told her adoring viewers how lucky it was to buy gold on Akshaya Tritiya — a holy day for Hindus and Jains. A day later, a few elderly Parsi ladies stepped into a showroom in Dadar to buy gold. It was 2004.

Till then, gold sold on Akshaya Tritiya rarely crossed 5 tonnes. In 2004, jewellers across the country sold 17 tonnes. The next year the number was 38 tonnes and in the subsequent year 44 tonnes of gold changed hands — a level at which it has stabilised since then.

The market suddenly expanded. Families purchased coins and bangles in regions where Akshaya Tritiya was an auspicious day to buy a house, or a car, and not necessarily gold, recalls Sanjeev Agarwal, the then World Gold Council's India chief, a marketing professional who sold chocolates and retail loans for multinational companies before he hit upon the idea of a new gold campaign.